EconPapers    
Economics at your fingertips  
 

From Neglect to Activism: American Politics and the 1985 Plaza Accord*

C. Randall Henning and I. M. Destler

Journal of Public Policy, 1988, vol. 8, issue 3-4, 317-333

Abstract: US exchange rate policy shifted in 1985 from unilateralist nonintervention to actively promoting dollar depreciation and multilateral cooperation. Pressures from producer interests, particularly multinational companies making manufactured goods, and from sympathetic members of Congress were the most important of multiple forces pushing the US Treasury toward dollar depreciation. Once the Treasury had chosen an activist course, a multilateral strategy had several benefits over a unilateral approach to depreciation. It could better counter the immediate threat to Administration trade policy from Congress, orchestrate depreciation, strengthen Treasury's influence within Washington and shift the burden of adjustment away from US fiscal policy, then frozen, onto other governments. When the trade account is in balance, individual policymakers have flexibility in determining exchange rate policy. But when large trade deficits arise, the domestic political pressures of trade-exposed sectors will dominate personalities and ideas.

Date: 1988
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://www.cambridge.org/core/product/identifier/ ... type/journal_article link to article abstract page (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cup:jnlpup:v:8:y:1988:i:3-4:p:317-333_5

Access Statistics for this article

More articles in Journal of Public Policy from Cambridge University Press Cambridge University Press, UPH, Shaftesbury Road, Cambridge CB2 8BS UK.
Bibliographic data for series maintained by Keith Waters ().

 
Page updated 2022-03-27
Handle: RePEc:cup:jnlpup:v:8:y:1988:i:3-4:p:317-333_5